Christina Lambert QC, representing Mr Thomson, told Worcester County Court that after discussions between both sides overnight, the case had been ended, adding: "So far as the parties are concerned this concludes the issues between them."

Miss Lambert said Guyanese-born Mrs Giles must now to pay Mr Thomson's costs of £30,000. Judge Daniel Pearce-Higgins QC, said: "It has the effect of fully exonerating him (Mr Thomson), leaving his professional integrity and reputation intact."

Speaking outside court Mr Thomson, from Worcester, said the court case had been "unspeakably stressful".

The doctor had vehemently denied the accusations, telling the court that after he operated on Mrs Giles for a prolapse in October 2006 she became obsessed, propositioning him and calling him frequently.

He broke down in tears as he said: "I had never expected to be standing outside a court delivering this kind of statement.

"tI am extremely pleased this is now over, the last three years have been a horrible ordeal. This week in court has been unspeakably stressful especially for my wife, our families and for me."

He added: "I've always tried to conduct myself in an entirely professional manner. The allegations Mrs Giles made, which are completely untrue, are some of the most serious that a doctor can be accused of, and threatened to ruin my career and reputation.

"I am therefore enormously relieved and delighted that this case has been concluded with my complete exoneration of these false allegations and that I am able to return to work on Monday with my professional reputation intact."

Mr Thomson thanked his wife and family for her "absolute belief" in him and his colleagues for their "unstinting support".